Joseph Kelso, an undercover informant for the U.S. Customs Service, slipped
quietly into Costa Rica in April 1986 on the trail of an elusive drug dealer.
Before his visit was over, he would be chased, beaten, shot at, clubbed, caged,
threatened with death, and deported. Kelso's horrific misadventures would earn
him a minor place in history, a footnote to one of America's worst scandals—the
Iran-Contra affair. His case would be cited by the congressional Iran-Contra
committees as one example of how Lieutenant Colonel Oliver North of the
National Security Council impeded law enforcement investigations to protect his
illegal Contra supply operation from public exposure.

But the four paragraphs about Joe Kelso—buried deep inside the official
Iran-Contra report—tell only a fraction of his story. How the former fireman
from Golden Valley, Minnesota, happened to attract the stony gaze of Oliver
North and his preppy CIA informant, Robert Owen, was never explained by the
congressional committee. That omission bothered several Democratic members
of the Iran-Contra panel—Congressmen Peter Rodino of New Jersey, Dante
Fascell of Florida, Jack Brooks of Texas, and Louis Stokes of Ohio—who
decided to write their own report on the matter of Joe Kelso. "The significance
of the Kelso section. . .of the Committee report is not entirely clear from the
facts as stated," the congressmen complained in a little-read appendix to the final
report. "In order to understand why Owen and North were so concerned about
Kelso, one must understand just what Kelso was doing and learning in Costa
Rica."

What Kelso was doing, records show, was investigating allegations that the
same Costa Rican DEA agents watching over Norwin Meneses and Danilo
Blandón were trafficking in drugs and funny money. What he was learning was
just how hazardous investigating such matters could be.

Kelso, a would-be spy and inveterate thrill seeker, had been working as a CIA
informant since the early 1980s, after he befriended a German-born arms dealer in Denver named Heinrich Rupp. Kelso said he was approached by a CIA agent
who called himself Bill Chandler and asked to gather information about Rupp's
activities. Rupp was selling arms to the Argentines during their short war with
Great Britain over the Falkland Islands, and the CIA wanted to know what they
were buying. At the CIA's suggestion, Kelso began working for Rupp, posing as
a weapons broker seeking arms for Iraqi president Saddam Hussein. The agency
figured it would draw some interesting people out of the woodwork, Kelso said,
but the mission ended in a minor disaster. The tough-talking twenty-six-year-old
was arrested by the U.S. Customs Service and charged with attempting to buy
Harpoon missiles—big radar-guided cruise missiles designed to blow up ships—
for the Iraqi government. Unbeknownst to Kelso, the men he had been
negotiating missile deals with were undercover Customs investigators.

Kelso's arrest presented the CIA with a problem; the agency's charter
prohibits it from spying on people inside the United States. To keep the
operation under wraps, Kelso was advised by his CIA handlers to keep his mouth
shut and plead guilty to the weapons charges, and they promised that his legal
problems would go away.

Federal court records lend support to Kelso's story. Despite the severity of his
crime—attempting to acquire cruise missiles for an unfriendly foreign
government—Kelso was put on probation and promptly vanished. Supplied with
a new identity and a matching passport, Kelso went back to work for the federal
government, this time as an informant for the very agency that had just arrested
him: the U.S. Customs Service. His control officer, Special Agent Larry
LaDodge, registered him as an informant under the name of Richard Williams
and sent him to Europe to hunt down a fugitive methamphetamine dealer who
was wanted in the United States on "numerous, numerous charges," Kelso said.

Kelso followed the dealer's trail around Holland and England, and then
LaDodge picked up word that the doper had a ranch in Costa Rica. In mid-1986,
Kelso went to find it. He also had another mission to perform while there:"a
standing directive" from the CIA to gather intelligence about Robert Vesco, the
millionaire swindler and fugitive who lived in Havana and had been flitting
through Costa Rica and Nicaragua during the time of the Contra war, always
managing to stay one step ahead of the law. Kelso found the methamphetamine
dealer's ranch, but not its owner; he "had a house on the Mexican border, so he
could hop back and forth between the U.S. border and the Mexican border to
continue to conduct his narcotics business."

But Kelso continued his search for Vesco; he found the financier's private jet,
he says, parked in a hangar in San Jose. When he checked to see who was paying
the storage bills, he learned that it was the owners of a shrimp company called
Frigorificos de Puntarenas—the cocaine-dealing CIA front that was helping
Oliver North funnel U.S. government money to the Contras.[Now did you catch that?DC]

"A decision was being made up here in the United States whether we were
going to put a satellite pinger on it or not," Kelso later testified, "and they chose
not to, even though we had such direct access."

While on his Vesco hunt, Kelso started frequenting a bar in San Jose across
from the headquarters of a right-wing political group known as Costa Rica Libre.
To hear Kelso tell it, the watering hole was like something out of Casablanca. It
was "where most of the upper echelon of Costa Rica Libre hang out," he testified
in a videotaped deposition taken in 1988. "Now the oddity that we found was
that the ETA [a left-wing guerrilla group] would hang out there and drink with
them. M-19 [a Colombian terrorist group] was there. The German Mafia people
were there. And it was just—they were drinking together, and having a good
time like they were old buddies."

From the carousing crooks and mercenaries Kelso picked up word that "the U.S. Embassy was dirty and the Embassy, you know, had leaks. . .in the visa
and passport section. Some 'Ticos'—or Costa Ricans—that were hired there had
been manufacturing passports for a long time and selling visas." Kelso said he
forwarded a report to the FBI, "and they turned around and shut the embassy
down for 45 days. . .while they did a security check." Then Kelso began hearing
rumors that DEA agent Robert Nieves, the country attache and Norwin Meneses control agent, had been taking cocaine from seizures made by the
Costa Rican narcotics police. Kelso said the allegations were largely conjecture,
but he confided them to Department of Defense officials stationed in Costa Rica.
"They just shrugged their shoulders and said, 'Geez, he found out' and, you
know, left it at that."

Kelso claimed that Agent LaDodge authorized him to pursue the allegations
further. He snooped around Nieves and the other DEA agents working at the
embassy for a couple months, enlisting the aid of a Canadian who worked as a
U.S. Customs informant, Brian Caldwell. By the end of that summer of 1986,
Kelso testified, he had "hard-core, documentable, bring-it-into-court
information." Six witnesses—current and former Costa Rican and American
government officials—were willing to testify that the DEA agents were
skimming cocaine from drug seizures, making counterfeit money, sanitizing
intelligence reports to Washington, and protecting cocaine processing labs in
northern Costa Rica, including at least two on Contra bases, Kelso testified.

"What did they say to you was their direct knowledge of Mr. Nieves and his
activities?" Kelso was asked during his deposition, which was taken by the
Washington-based Christie Institute as part of a civil racketeering lawsuit it filed
in 1986 against a variety of current and former government officials involved
with the Contras.

"Well, they were all reverting back to direct involvement with narcotics
smuggling and—if you want to use the word—protection in that situation. And
that's the bottom line. I mean, it was all relative to that, with exact situations,
exact information, documentation." The witnesses also told Kelso that the
Contras were "involved in coke. And these were the people that also reiterated
that these are 'bad' Contras. These particular Contras were, in fact, involved in
narcotics, and were, in fact, involved in smuggling. Period."

One of Kelso's "witnesses" was Warren W Treece, the deputy director of the
Narcotics Department of the Costa Rican Ministry of Public Affairs. Treece,
according to a 1989 Costa Rican prosecutor's report, had had a strange
experience with one of Nieves's men, Sandy Gonzalez—the DEA agent who'd
yelled at L.A. detective Tom Gordon about the phone lines running through
Nicaragua. "Information of the existence of a cocaine laboratory in the Nicoya
peninsula and another one in Talamanca were transmitted by Treece to an
official of the DEA with the surname of Gonzalez, in Costa Rica, but they were
not investigated on account of the leak of information from this agent," Costa
Rican prosecutor Jorge Chavarria wrote. "As Treece and Kelso affirmed, that
person was protecting those laboratories."

Gonzalez and Nieves were never charged with a crime either in Costa Rica or
the United States, and the allegations were never proven. In response to a
Freedom of Information Act request, the DEA claimed it could find no records
about Kelso or his investigation—rather unbelievably, considering that some
DEA records concerning Kelso were made-available to Iran-Contra investigators
in 1987. The DEA would not allow Gonzalez to be interviewed, and Nieves
refused to answer any questions.

Costa Rican attorney Gloria Navas, a former prosecutor and judge who
advises the Costa Rican Legislative Assembly on drug issues, strongly believes
that the DEA agents stationed in Costa Rica during the Contra war were not what
they appeared. "In my opinion, both Nieves and Sandy Gonzalez were connected
with the CIA. There is no doubt," insisted Navas. "You aren't going to find hard
evidence because these were covert operations. But I did my own investigations
and you can't come to any other conclusion." The DEA refused to release any
records or answer any questions about the agents' backgrounds or their possible
work for other government agencies.

"Sometimes the lines really got blurred when you were working for Oliver
North," agreed former Iran-Contra Committee attorney Pam Naughton, who
investigated the Justice Department's role in the scandal. "He was using DEA
agents in Europe as CIA. I mean, they were doing activities that were way
beyond the scope of the DEA. Those were clearly, clearly covert activities."

One of those double-duty DEA agents was James Kible, a Madrid-based
agent who visited jailed Medellín cartel boss Jorge Ochoa in Spain in 1984 and
attempted to persuade him to publicly implicate the Sandinistas in drug
trafficking. According to a 1987 story in The Nation, Kible "was one of a select
group of DEA operatives who conducted secret missions for Oliver North and
the National Security Council. On October 24, 1986, Kible and another DEA
agent, Victor Oliveira, were apprehended by Spanish customs officials while
boarding a plane for Switzerland at Madrid's Barajos Airport. In their possession
was a briefcase filled with $5 million in cash. According to Spanish government
officials quoted in El Pais of May 9, 1987, the money was destined for a bank
account in Zurich controlled by North's contra-aid team. Some of the funds were
intended as ransom to free American hostages in Lebanon."

At the time DEA agents Nieves and Gonzalez were stationed in Costa Rica,
the CIA station chief was Joe Fernandez, a close friend and confidant of North
who was later forced to resign from the CIA for his illegal involvement with the
Contras. Fernandez was indicted by Iran-Contra prosecutor Lawrence Walsh, but
the charges were dropped on November 22, 1989, when the U.S. Attorney
General, Richard Thornburgh, refused to declassify records needed in the trial,
the first time in history that had ever happened.

Kelso said his witnesses claimed the CIA was involved in the operation of a
drug lab at a Contra base near Quepos, Costa Rica. "So, it was my problem, or
my duty, to go and respond back to the CIA that this allegation is—is that we got
two CIA agents at Quepos at this laboratory participating in drug manufacturing,
okay?" Kelso said. He said it was later determined that the men may have been
part of North's resupply operation "and not, in fact, CIA personnel."

Kelso claimed to have obtained maps pinpointing the locations of thirty-two
cocaine labs in Costa Rica and some personal papers of the DEA agents,
including their radio code names—Jaguar 1, 2, and 3. A Customs agent familiar
with the case said Kelso stole Agent Nieves's briefcase from his car. In an
interview with the author Kelso denied this, but laughed while doing so.

At the end of July 1986, Kelso felt he had enough information about the
DEA's activities to report his findings to his control agent, Larry LaDodge, and
to the U.S. military's Southern Command headquarters in Panama "to the CIA
officer there. It was hand-carried, on a microcassette." The allegations of
counterfeiting were sent to the Secret Service.

William Rosenblatt, then head of enforcement for U.S. Customs, confirmed
in a deposition that "Mr. LaDodge had received communications from one of
these two gentlemen by telephone that they had uncovered a counterfeit
operation in Costa Rica, and there was other information that the informants
wanted to provide. . .but they did not feel comfortable doing it over the phone."
That "other" information, Rosenblatt said in once-secret testimony to Congress,
concerned "narcotics allegations relative to the Drug Enforcement
Administration." Rosenblatt said the allegations were taken seriously in
Washington: the Customs Service "coordinated with the Secret Service as well as
our Customs attache in Panama, who is responsible also for the country of Costa
Rica. Arrangements were made for one of the New Orleans agents to travel
through Miami down to Costa Rica to meet up with the informants and the
Secret Service, so that we could provide firsthand information to the Secret
Service about this alleged counterfeit money operation."

The New Orleans agent, Douglas Lee Knochenberger, met with Kelso and
Caldwell in early August "ostensibly to debrief them and also to pay them the
money that Mr. LaDodge felt was owed to them," Rosenblatt testified. "He did
not check in with the Embassy. He immediately met with the informant, paid the
informant and to some extent debriefed the informant."

According to the Iran-Contra committee minority report, Kelso and Caldwell
"told Customs that the DEA agents in Costa Rica knew the location of drug
laboratories and had been paid to conceal the location of narcotics." Kelso said
he gave Knochenberger maps showing the locations of the drug labs, cassette
tapes of interviews, and other documents. But Knochenberger—whom Kelso
called a "newbie" and Rosenblatt termed "relatively inexperienced"—became
nervous, insisting that he had to report the information to DEA attache Nieves at
the embassy.

Kelso couldn't believe his ears. "If we had this rumor and either qualified it or
disqualified it, going and telling this person that you're doing research on him,
qualifying it or disqualifying it, would be stupid," Kelso testified, "because if he
is doing it, he would normally head over the hill or protect himself well enough
that no one could touch him." Kelso said Knochenberger "had explicit orders not
to say anything to Nieves. . .to keep his mouth shut, go in there, tell him he
found nothing, that it was a waste of time, get back on the airplane immediately
with all the documentation and get the hell out of town."

The agent's response, Kelso said, was: "'Wow, that's not State Department
policy. I can't do that. I'm going to get in trouble.'" Knochenberger made a
beeline for the U.S. embassy and spilled everything to the very DEA agents
Kelso and Caldwell had just fingered.

"Both the Customs representative from our Panama office, as well as the
Customs agent from LaDodge's office sat down with the DEA personnel [deleted] and related, summarized, however you want to, discussed what the
informant had said, to include the allegations of corruption by DEA officials
[deleted]," Rosenblatt confirmed.

Iran-Contra lawyer Pam Naughton, who was questioning Rosenblatt, was
incredulous. "Did they do that on your instructions, or was that their own idea to
tell the DEA about the allegations of corruption in their midst?" she asked.

"That was their idea," Rosenblatt insisted. "They didn't do that on my
instructions. I didn't even know about this until after they came back." He agreed
that "one may believe it is not prudent to tell the very same office what the
allegations were. . .and relate those allegations to them," but pointed out that it
was "part of the agreements that we have-that we fill in DEA about narcotics
information."

The next day, while Kelso and Brian Caldwell were lounging in their rooms
at the Irazu Hotel in San Jose, the DEA called the Costa Rican national narcotics
police and asked them to arrest the two foreigners on the grounds that they were
impersonating narcotics agents. One of Nieves's subordinates, Kelso said, "came
stomping in there and demanding to see Caldwell and the stuff. . .and he saw a
couple rolled up maps and he started yelling, you know, 'Are those some of those
goddamned maps,' you know, 'floating around here?' And, 'We want those,' and
started taking them." The DEA agent, accompanied by two Costa Rican national
police agents, "started confiscating everything in the room, tried to do
notebooks, things like that, my briefcase."

Kelso and Caldwell were hustled off to a construction warehouse owned by
the Costa Rican electric company, where they were shoved around and
interrogated about whom they were working for. When Kelso told of finding
Robert Vesco's airplane, he said, the DEA agent became "extremely nervous. .
.then he says, 'Get in the fucking car,' so we go in there and we go down to the
OIJ [the Costa Rican national police] main office, right up to the director's office
there."

Soon, Kelso said, DEA agent Nieves "comes in and he starts screaming, 'I'm
going to blow your fucking ass away!' and 'You son-of-a-bitch!' and on and on
and on. . .he's short-tempered anyway. I said, 'All you are is a motherfucking
Puerto Rican.' And that—that's the key word that makes him trip off, okay? And
I mean, he gets psychotic and just goes bananas."

According to Kelso, Nieves told him, "'You're a dead son-of-a-bitch.' You
know? And he must have repeated, you know, 'We're going to blow your fucking
head off!' about 50 times. You know? I mean, he was furious, absolutely out of
control." Kelso's story was confirmed by Costa Rican police officials who were
questioned during the Costa Rican government's investigation of the incident.

According to the Costa Rican paper La Nacion, which asked Nieves about
Kelso in 1986, "Nieves did not disguise his anger about the fact that the U.S.
Customs was investigating a matter that is a priority task for the DEA." Kelso was taken to the U.S. embassy, where he said the DEA agents began
copying the documents in his briefcase until "a person that I never saw before
came in, sat down at one of the desks, very nice suit, well dressed, which later I
learned, that's Rob Owen." What Kelso didn't know was that Rob Owen was the
eyes and ears of both the CIA and Oliver North on the Southern Front. Kelso
testified that after Owen got a look at the documents seized from the hotel room,
he ordered the DEA agents to stop making copies, whisked Kelso out of the
embassy, and dropped him back at his hotel. Owen, in a deposition, admitted being in Costa Rica during August 1986,
right around the time Kelso was abducted, but he denied meeting him. Shaken, Kelso ran to Costa Rican narcotics investigator Warren Treece's
house and hid out. The next day, he said, Nieves called him there and ordered
him back to the embassy. Kelso refused, and Nieves told him he would be at
Treece's house in five minutes. "I said, 'Fuck you, try to find me,' and I slammed the phone down." And then he ran for his life. Treece and Alexander Z. McNulty, the chief of security for Costa Rican
president Oscar Arias, took Kelso "up in the jungle" and dropped him off, and
then returned to San Jose to pick up weapons and one of the presidential security
cars. Kelso said he had been instructed by his handlers to rendezvous at CIA
operative John Hull's ranch if he got into trouble, because Hull had an airstrip
where he could make a speedy getaway. In the dead of night, Treece and
McNulty drove Kelso north to Hull's well-guarded compound and dropped him
off with a dentist friend of Hull's, where he spent the night. The dentist drove
Kelso onto Hull's ranch the next day. Rob Owen later recounted the meeting in a deposition: "This guy [Kelso]
came in and said, 'Look, I have been told that you are the one guy I should
contact. There is a real problem here. I think the DEA people are trying to kill
me. I am convinced that they were involved in narcotics trafficking and looking
the other way. And I don't know who else to turn to.'" Hull, in an interview, confirmed that. He wrote a report on Kelso's visit the
next day, noting that Kelso claimed "[name deleted] of the U.S.A.-D.E.A. has
maps of coke lab locations in Costa Rica but is protecting them. One large lab
located in southern Nicoya. And another in Talamanca region." While Kelso talked, Hull carefully examined the stranger's passport, which
bore the name Richard Williams and "showed immigration stamps for several European and Mideast countries." Though Kelso clearly seemed in fear for his life, Hull—who'd been accused
repeatedly of facilitating Contra drug trafficking—was wary, thinking Kelso
might have been sent by the Sandinistas to set him up on drug charges. "Not
being known for wisdom or prudence, but having just heard that the USA-DEA
team had checked in their white hats for black ones. . .I decided to call the local
Rural Guard and the local DIS Dept. internal security," Hull wrote in his August
9, 1986, report of Kelso's visit. He put Kelso in his guest house, under guard,
until he could figure out what to do with him. About three in the morning, Kelso said, he was jolted out of bed by automatic
rifle fire. Peering into the darkness, he saw a yard full of Costa Rican Rural
Guards armed with AK-47 assault rifles and heard "this guy yelling something in
Spanish." Kelso, wearing only his undershorts, was pulled out of the guest house
and, at gunpoint, marched across the yard toward Hull's house. Suddenly, Kelso felt his head explode. One of his captors bashed him from
behind with the butt of his assault rifle, "and I reach up there and fucking draw
blood, and I turned around and, you know, this guy's serious, you know?"Kelso was pushed forward again, "and then halfway up, he hits me again and
knocks me right down to the ground."Hull watched the impromptu parade from his porch with growing concern. "It
was a very, very obvious attempt to get him to resist so they could shoot him," he
recalled. "This colonel came running up and pointing his finger at me, saying,
'The [U.S.] Embassy says he's extremely dangerous. It's better I kill him than he
kill me.'" According to the Costa Rican prosecutor's report, the embassy official who
issued those dire warnings was DEA agent Nieves. Hull's report stated that the
embassy told the Rural Guard colonel that Kelso "should be shot if he resisted
arrest."The Contras on Hull's ranch surrounded the Costa Rican intelligence agents
who were beating Kelso, Hull said, and pulled out 12-gauge riot guns, which
they leveled at the Costa Ricans. "All their guns were down and all the Contra
guys were ready to pull the trigger," Kelso said. The Contras reminded Hull of
"Alabama guard dogs that had been told to bite a black and couldn't decide
which one." Hull ran down and broke up the standoff, permitting the Rural Guard to take
Kelso away. The woozy Customs informant was tossed into the back of an Isuzu
Trooper and taken to a Rural Guard facility in San Jose, where, he said, he was
thrown"into this little dog—well, it's, you know, a cell, but it's like a dog cage." U.S. Ambassador Lewis Tambs, at Nieves's request, asked the Costa Rican
government to deport Kelso for using a false passport to enter the country, he
said. After several hours in the cage, Kelso was put aboard the next plane out of
the country. Hull typed out a detailed letter on Kelso's visit and gave it to CIA informant
Rob Owen, telling him to deliver it to Oliver North once he got back to
Washington. Owen testified that "I went in to talk to North and gave him a copy
of the letter and said, 'I am concerned because I don't know whether Hull is
being set up, whether there is a problem with the DEA, or what is going on.'" In his letter, Hull wrote North: "Since you are in Washington you might
check these things out. If the DEA people are in the drug business it should be
stopped." Hull eventually came to believe Kelso was telling the truth about his
investigation: "He was giving me locations of cocaine labs in Costa Rica and
who they belonged to and then a week later one of them was busted and it was
right where he said it was." By the time Kelso arrived back in Denver, bells were ringing all over
Washington. Customs enforcement chief Rosenblatt received a blistering cable
from Ambassador Tambs, chewing him out for "having informants in Costa Rica
without the Embassy knowing about it. . .. I apologized profusely that it
happened and I assured him that these informants had not gone down there with
our approval, and if they had, we would have definitely let the Embassy or the
Ambassador know about it and all I was doing there for about 15 minutes was
apologizing profusely, assuring them it wouldn't happen again." Back in Denver, Kelso met with his lawyer, former federal prosecutor Rod
Snow, and told him he feared for his safety. He asked Snow to hold onto the
evidence he'd gathered in Costa Rica—tapes of interviews he'd done with U.S.
intelligence agents and Costa Rican officials. Snow listened to them and called
U.S. Attorney Bruce Black, urging him to do the same. But before he turned the
tapes over, Snow wanted Black to promise that the tapes would not wind up in
Washington because Kelso was afraid they would fall into the "wrong hands." Black agreed, but the tapes ended up there anyway.
After listening to Kelso's tapes, Black called the special agent in charge of the
Denver office of U.S. Customs, Gary Hilberry, and had him listen. Hilberry
immediately phoned Washington, telling Rosenblatt that "based on the contents
that he was very concerned, that one could almost make a case from these
conversations, that there was some connection between Kelso and some member
of the intelligence community," Rosenblatt testified. "I have known Gary
Hilberry a very long time. He is now our special agent in charge of New York.
He is not an alarmist. . .therefore, I called Colonel North."Asked why he would call the National Security Council about a Customs
agent's investigation of the DEA, Rosenblatt bluntly admitted that he was
covering the Reagan administration's ass. "My objective was to save any potential embarrassment to the government,"
he testified. "My main purpose was to find out whether Kelso/Williams was
working with the intelligence community because of the tapes that Gary Hilberry
had, and the potential for embarrassment." Rosenblatt "went through the whole story with [North] from beginning to
end. The Costa Rica business." He told North that Kelso had tapes to back up his
charges "and was threatening to go to the media about his connection to the
intelligence community." It was a threat to be reckoned with. As Rob Owen
discovered after talking to Kelso's control agent, Larry LaDodge, Kelso really
was who he claimed to be. "He validated the claim that Kelso was an asset,"Owen testified. LaDodge told him that "Kelso said he was working for the CIA.
He passed the polygraph. LaDodge started using him as an asset."Customs official Rosenblatt testified that North knew all about the Kelso
affair and didn't seem eager to talk about it over the phone. "He indicated he was
extremely busy, but he was going to have Rob Owen call me. . .. It was clear to
me that he wanted me to deal with Rob Owen on this matter." When Owen came
around, Rosenblatt testified, he assumed the young man was on North's staff at
the National Security Council. He told Owen about the tapes—which he
numbered at "around six or seven"—and agreed to let Owen listen to them "and
see if he recognized any voices. . .we were looking to use the NSC as a vehicle
to determine whether or not the accusations made by Kelso/Williams were
accurate." Owen confirmed that he picked up the tapes from Customs in Washington
and listened to some of them. The tapes he heard were of Customs agents
debriefing Kelso's chief informant, Warren Treece, Owen said. "There was some
thought that, at least according to Mr. Treece, that the Drug Enforcement
Administration officials may have been on the take," he remembered. "There had
been accusations made about Drug Enforcement Agency officials being involved
in receiving funds to look the other way regarding narcotics trafficking in Costa
Rica." Rosenblatt said he washed his hands of the matter after he turned the tapes
over to Owen, and he never heard another word about it. "I assumed that by not
hearing from Owen or Colonel North, they were not coming up with anything
positive," he said. The congressmen on the Iran-Contra panel were stunned by Rosenblatt'sactions. "He gave his only copy of tape recordings made by an undercover
source to a total stranger," the congressmen complained. "Owen did not tell
Rosenblatt he worked for North or the CIA. He told him he worked for a private
organization. Not surprisingly, Owen never returned the tape recordings. Instead,
he made two trips to Costa Rica to meet with the DEA agents." Owen said his last trip to Costa Rica to meet the DEA agents occurred in
October 1986. Within a day or two of the Iran-Contra scandal breaking, Owen
threw the Kelso tapes away. "They were thrown out, along with a bunch of other
stuff, when I moved," he testified. They were never seen again. When the Iran-Contra committees heard about the Kelso investigation, they
asked the DEA to provide them with the records of the case. "It was like pulling
teeth out of Justice to get any cooperation, and we finally had to threaten
everything imaginable to get to these documents," Iran-Contra committee
attorney Naughton said. "Finally they caved in. And we had to go over to Justice
to look at them in their secure area, on the sixth floor or wherever it is, and it
reminded me of Get Smart—remember all those doors you had to go through?
That's how it was. We finally get to the situation room and they had turned down
the heat to about 30 degrees so that we wouldn't stay long. So they said, 'Here
are the documents'—and they're all in Spanish."Naughton said that, to her knowledge, the DEA never investigated the drug
trafficking allegations against the Costa Rican agents. DEA director Jack Lawn
told Congress in 1987 he'd never heard of the case. The U.S. Customs Service
also quit looking. Customs agent Hilberry said the DEA allegations were "turned
over to the DEA." Two Costa Rican intelligence officers were eventually charged with illegally
arresting Kelso, but the only American agent to go to jail as a result of the
investigation was Joe Kelso. In January 1987 he was charged with violating his
probation on his 1983 weapons charge—by being in Costa Rica—even though
the Customs Service had been sending him all over the world for four years. During Kelso's probation hearing both Snow and U.S. Attorney Bruce Black
vouched for his credibility. "Some of what he said has totally checked out to the
best of my ability to corroborate it, but some is inherently unverifiable," Black
told U.S. District Judge Sherman Finesilver. He confirmed that "Kelso worked
around the world under another name for several U.S. Customs Service
operations." Argued Snow: "By his belief, and quite frankly mine, he is working for the
government. I believe and the U.S. Attorney believes there is a fairly high
percentage of truth to what he is saying."But Judge Finesilver wasn't interested. He ordered Kelso to prison for two
years for violating his probation, "and didn't discuss the matter further," a
newspaper report stated. Kelso served his time quietly at Pleasanton federal prison camp in California
and later became involved in a short-lived attempt to help an Italian financier
buy MGM studios in Hollywood. The target of Kelso's investigation, DEA agent Robert Nieves, went on to
have a long and illustrious career at the DEA, rising to great heights. Me became
head of cocaine investigations in Washington, then chief of major investigations,
and at the time of his retirement in late 1995, he was serving as chief of the
DEA's International Division. After his retirement, Nieves went to work for a
body armor manufacturing company in Virginia—Guardian Technologies. That
company is owned by Oliver North, and the CIA's former chief of station in
Costa Rica, Joe Fernandez.

18

"We Bust our ass and The

Government's Involved"

On the morning of October 23, 1986, Sergeant Tom Gordon did precisely what
Costa Rican DEA agent Sandy Gonzalez had told him not to do: he drove down
to L.A. County Municipal Court, went before a judge, and applied for a warrant
to search the Nicaraguans' drug operation. His twenty-one-page sworn statement
described a "large scale cocaine distributing organization" made up of "well over
100 persons storing, transporting and distributing cocaine for Danilo Blandón."

Gordon linked up Blandón with Freeway Rick's first major drug supplier,
Ivan Arguelles, exposing the Contra drug pipeline into South Central. Blandón,
he wrote, "has up to 20 kilos of cocaine per week delivered to Arguelles who, in
turn, sells mainly to blacks living in the south central Los Angeles area."
Another South Central distribution point was a bar at Central Avenue and Adams
Street, which Blandón uses "to distribute as much as 10 kilos of cocaine per
week," the affidavit said. And the detective didn't pull any punches when it came to the Contras.
"Danilo Blandón is from Nicaragua, a Central American country which has been
at civil war for several years," Gordon wrote. "One side of this civil war is the
'Contra army.' Informant] #2 stated to your affiant that Blandón is a 'Contra'
sympathizer and a founder of the 'Kronte [sic] Demoeratica Nicaragua' [FDN] an
organization that assists the Contra movement with arms and money. The money
and arms generated by this organization comes through the sale of cocaine." Gordon listed more than a dozen locations across southern California where
Blandón and his cohorts were storing drugs and cash. He traced the money trail
from Los Angeles across the country, writing that the "monies gained from the
sales of cocaine are transported to Florida and laundered thru Orlando Murillo
who is a high ranking officer of a chain of banks in Florida named Government
Securities Corporation. From this bank the monies are filtered to the Contra
rebels to buy arms in the war in Nicaragua." Gordon's sworn statement would prove to be a remarkably accurate portrait
of the drug ring. A decade later Blandón would admit under oath that he was one
of the founders of the FDN, and that nearly all of the people and locations
Gordon named in his warrant were part of his drug operation. Blandón would
also admit sending money to Orlando Murillo, who did, in fact, work for
Government Securities Corporation, a chain of securities brokerages in southern
Florida that went belly-up in 1987 amid federal allegations of fraud. The one
accusation Blandón denied was that his father—Julio Blandón, the ex-slumlord
—stored cocaine in his San Gabriel apartment. Gordon's affidavit was pure political dynamite. At the time, the Contras were
the hottest story in the country. Less than three weeks earlier, drug smuggler
Barry Seal's old C-123K cargo plane had been shot out of the sky over
Nicaragua, carrying a full load of weapons. Since then, new revelations about
illegal U.S. government involvement in the Contra war had been appearing in the
media almost daily. The White House, the State Department, and the CIA had
immediately denied that the cargo plane—which was part of Oliver North's
resupply operation—had any connections to the government, but those lies
began unraveling the moment Sandinista patrols got back from the site of the
smoldering wreck. "The Sandinistas announced that the flight crew had not been flying with
what we call in the business 'clean pockets,'" said Alan Fiers, the CIA officer
then in charge of the Contra program. "They had all sorts of pocket litter that
identified and connected them back to Ilopango. They had the cards of some of
the NHAO—one particular NHAO employee, flight logs, essentially enough
information so that the Sandinistas could put together, and did in fact, a lot of
information relative to the connections of that flight." If that wasn't enough, the Sandinistas also had one slightly battered cargo
kicker named Eugene Hasenfus, the only crew member carrying a parachute.
Hasenfus, who'd worked for the CIA's Air America airline during the agency's
secret war in Laos, told the press that he was again working for the CIA—at a
time when the agency was allegedly not involved with the Contras. Hasenfus
identified his CIA handlers as Ramon Medina, the alias of the Cuban terrorist
and suspected drug trafficker Luis Posada Carriles, and Max Gómez, an alias of
former CIA agent Felix Rodriguez. Hasenfus also exposed the secret Contra air
base at Ilopango. Aside from the legal problems Hasenfus presented for the administration, he
was an even bigger political headache—living proof that the CIA and the White
House had been lying about U.S. involvement with the Contras. The burgeoning
scandal threatened to derail the administration's hard-fought efforts to win
congressional approval for $100 million the CIA needed to restart the Contra
war. When the cargo plane went down, the new aid bill was in the final stages of
passage through Congress. Reagan administration officials scrambled to keep a
lid on the incident, sending out false press advisories, booking administration
spokesmen on political talk shows to spread the official line, and sending CIA
officials to Capitol Hill to give false testimony to bewildered congressional
committees. The disinformation campaign, combined with a strange reluctance
by the congressional intelligence committees to delve too deeply into the matter,
worked long enough to get the $100 million aid bill through Congress. But now, with the legislation sitting on Reagan's desk awaiting his signature,
a respected Los Angeles narcotics detective was formally accusing the Contras
in court of raising money by selling cocaine to black Americans. It is not
difficult to imagine what would have happened to the Contra project had that
information gotten out. Unlike the earlier allegations of Contra drug dealing that
had appeared sporadically in the press over the past ten months, Gordon's
charges would not be easy for the law-and-order Reagan administration to
dismiss as the fantasies of a Sandinista sympathizer or a convicted drug dealer.
This time, the accusations were coming from the police—under oath—in black
and white. Gordon's affidavit was persuasive enough for Municipal Court judge Glenette
Blackwell. She gave the detective his search warrant. The next day, October 24, Gordon conducted a lengthy pre-raid briefing at the
sheriff's training center, handing out raid plans, briefing booklets, raid
assignments, and radio frequencies, and locating command centers. As drug raids went, this was going to be a big one. "On Monday, October 27,
1986, a 30-day investigation will culminate by executing a search warrant that
will be served at fourteen locations in Los Angeles, Orange and San Bernardino
Counties," the briefing book stated. It would involve more than forty-five agents
from the Majors, the DEA, the IRS, the ATF, the San Bernardino County sheriff,
and Bell police. Gordon split the officers into seven groups, each responsible for
searching two locations. Gordon's briefing left no doubts about who and what the police were up
against: "The investigation centers around a male Nicaraguan named Danilo
Blandón. The Blandón organization is believed to be moving hundreds of kilos
of cocaine a month in the Southern California area and the money is laundered
through a variety of business fronts and then sent to Florida where the money
goes toward the purchase of arms to aid the 'Contra' rebels fighting the civil war
in Nicaragua."Gordon also mentioned that the drug ring involved a crooked ex-cop from
Laguna Beach, Ronald Lister, who was known to have access to large quantities
of heavy weapons. He was to be considered extremely dangerous. Several of the officers in attendance distinctly recalled being warned that the
federal government was unhappy that the Majors were going ahead with the
raids. Deputy William Wolfbrandt said Gordon reported that he had "been
contacted by someone from the government who told him not to do the warrant. .
.. I thought it was pretty bitchin' just going out and doing it anyhow." Lieutenant Mike Fossey, the Majors' intelligence officer, said it "was before
the warrant [was served] that we were forewarned that there may be a CIA link";
information had "filtered down" that the "CIA and the Contras were dealing in
arms and cocaine for Nicaragua." According to Deputy Virgil Bartlett, the general belief among the police that
day was that "the U.S. government backed the operation. . .. The government
was bringing drugs into the country and shipping weapons back out." Bartlett
said he was informed that Ronald Lister "had done jobs for the federal
government, and we weren't so sure he hadn't done hits for them." (No evidence
has surfaced linking Lister to murder.) Jerry Guzzetta, who was assigned to search Blandón's mountain cabin near
Big Bear ski resort, glanced around the briefing room to see which federal agents
were there. To his surprise, they were not the ones he'd been working with
during the investigation. Guzzetta thought it "strange that federal agents from the
Riverside DEA and FBI offices initially worked with the L.A. Sheriff's Narcotics
investigators on the Blandón case, but Los Angeles DEA and FBI agents were
present at the briefing and later during the warrant execution." Around 7:00 A.M. on Monday, October 27, the raid teams gathered at their
designated staging areas, taking their last few gulps of coffee and strapping on
their bulletproof raid vests. As they methodically went through their final
preparations, coincidentally, another kind of ritual was unfolding back in
Washington. That day Ronald Reagan would triumphantly sign his name to the bill
authorizing the CIA to spend $100 million on the Contras. It was now official.
After a two-year absence, the CIA was back in the Contra business. As Danilo Blandón's neighbors stepped onto their porches to retrieve that
morning's edition of the L.A. Times—the front page was headlined "Contras Seek
Quick Results on Two Fronts"—four big cars roared up to Blandón's elegant
home and disgorged eleven heavily armed men wearing flak jackets. They
quickly surrounded the house and banged on the front door, hollering that they
had a warrant. "We'd certainly never seen the likes of it," one elderly neighbor
said. "It was the talk of the neighborhood for quite some time, I can tell you.
And they seemed like such a nice family. They had a maid, and the two little
girls were so cute." Chepita Blandón, wearing a pink housecoat, sleepily opened the door, and
Deputy Dan Gainer of Majors II thrust Gordon's warrant in her face. The raid
team shouldered her aside and fanned out through the two-story house, emptying
drawers and closets. Blandón, wearing a pair of green shorts and a brown shirt,
stood silently by his ten-year-old daughter and watched the agents rummage
around. The maid, Rosa Garcia, cuddled the Blandóns' twenty-one-month-old
daughter. Jerry Guzzetta brought in a drug-sniffing dog, and the hound alerted in the
master bedroom and the rec room. A search of the bedroom turned up an
envelope with a gram of cocaine in it, a maroon briefcase with three-tenths of a
gram of cocaine inside, an AR-15 assault rifle with five full magazines of
ammunition, a Mossberg 12-gauge shotgun with three boxes of shells, $163, and
some assorted papers. Out in the detached recreation room, which had a full bar and pool table
overlooking the golf course, Deputy Wolfbrandt found an envelope behind the
bar with a folded $10 bill inside; the bill held one and a half grams of cocaine.
He also found "pay-owe" sheets—records of drug transactions. It wasn't much, but a couple grams of coke and some pay-owes were all the
detectives needed to justify an arrest for possession for sale of a controlled
substance. They slapped handcuffs on both Blandón and his wife, read them
their rights, and marched them out to the waiting cars for a trip to the San
Bernardino County Sheriff's station—and jail. "As the suspects were being taken from the location to be booked," the police
report said, "suspect #1 [Danilo Blandón] spontaneously stated, 'The cocaine is
mine. The cocaine is mine. It's mine.'" Now the cops had a confession to go with the coke. The drug kingpin was as
good as convicted. Across town, however, the other raid teams were not doing as well. Location
after location was coming up dry. Some of the houses looked as if they had been
scrubbed clean. One officer reported finding an empty safe with a garden hose
running into it. Another said an occupant told him he'd been expecting him for
an hour. DEA agent Hector Berrellez—who would later discover evidence of CIA
drug trafficking in Mexico—was one of the L.A. agents assigned to the Blandón
raids. He accompanied the team that hit Roberto Aguilar's house, who was
reputed to be Blandón's chemist. "There was a safe at the house which the
occupants were told to open," Berrellez told Justice Department inspectors.
Inside was "a box containing photographs, and ledgers typical of those that big
drug dealers keep. . .the photographs were of men in military uniforms, and
military operations." The agent specifically recalled seeing "a photograph of a
man in an aviator's flight suit standing before a warplane and holding an
automatic weapon."Berrellez said the people in Aguilar's house told the police they knew the
search was coming and had been expecting the raid team. They didn't say how
they knew, Berrellez said, but he'd heard the CIA may have monitored the
Blandón case through the DEA's El Paso Intelligence Center—EPIC—from
which the CIA, among other agencies, draws sensitive narcotics intelligence. [Now ask yourself this,is there CIA involvement with the cartels of Mexico here and now in 2019? DC] The word started circulating among the raiders. Something was fucked.
"We're just going through the motions," one of the officers griped. Down the coast in Orange County, Detective Bobby Juarez and his team were
banging on Ronald Lister's door in Mission Viejo. Receiving no reply, they
kicked it open. The house was uninhabited, but it wasn't empty. The detectives
came out carrying bags of records, card files, video monitors, and photographs,
which they tossed in a patrol car. A neighbor wandered over and told them that
the Listers didn't live there anymore. They'd moved recently to an even bigger
house a couple miles away. "Male and female Latins were now living at the
Lagarto address," the neighbor reported. Some of the seized paperwork showed
the neighbor was right: there were letters, video rental receipts, and bank records
for someone named Aparicio Moreno and his wife, Aura. The discovery of those documents corroborated another accusation that the
DEA informant inside Blandón's ring had made: that Aparicio Moreno, a
Colombian, was involved in the Contra drug operation. The informant described
Moreno as a cocaine supplier and money launderer to both Norwin Meneses
San Francisco-based branch and Blandón's network in L.A., and said Moreno,
his wife, and his family had hauled millions in drug profits to Miami for the two
Nicaraguans, hidden in an innocuous-looking motor home. Blandón would later admit that Moreno had supplied him with "so many"
thousands of kilos of cocaine in 1984 and 1985 that he couldn't put an exact
number on them. He said he was introduced to Moreno by Norwin Meneses and
worked with the Colombian until 1987. It is likely that Meneses turned Blandón
over to Moreno when Meneses moved to Costa Rica to work as a DEA
informant. Ronald Lister would tell police in 1996 that Moreno was "affiliated
with [the] FDN," and Blandón strongly suggested the same thing during his
interviews with the CIA Inspector General's Office. Blandón claimed that Moreno arranged "at least one 1-ton delivery that was
delivered by air via Oklahoma," a summary of his CIA interview states. Blandón
said "he and his associates thought the plane might be connected with the CIA
because someone had placed a small FDN sticker somewhere on the airplane.
This was just a rumor though." It was a rumor that the CIA Inspector General apparently never bothered
investigating, as there is no further mention of Aparicio Moreno in the entire
declassified report. But considering what else is known about the mysterious
Colombian, the omission is not surprising. Moreno had an affinity for dealing
dope to people with CIA connections. Records show DEA agent Celerino Castillo III ran across Aparicio Moreno's
trail in Guatemala in 1988 while investigating allegations of drug trafficking by
a Guatemalan CIA agent, Julio Roberto Alpirez. A high-ranking officer in the
Guatemalan military and a fixture on the CIA's payroll there, Colonel Alpirez
was accused by the president's Foreign Intelligence Oversight Board in 1996 of
covering up the murder of an American innkeeper in Guatemala, Michael
Devine. Castillo said he discovered that Aparicio Moreno was both supplying Colonel
Alpirez with cocaine and selling drugs for Alpirez that had been seized by the
Guatemalan military. Castillo believes Devine was killed by Guatemalan soldiers
after he had discovered that the military was moving cocaine, a theory that has
never been proven. DEA files obtained under the Freedom of Information Act confirmed that
Castillo reported Moreno's activities in Guatemala to the DEA, but the agency
censored all of the information in his reports. From the records, it appears
Moreno was also working as a DEA informant, in addition to his other activities. After securing Moreno's residence, Juarez and his crew raced over to Lister's
new house and performed a "soft knock." Since they didn't have a warrant for
that address, they needed Lister's permission to search it. A rumpled man in a
bathrobe opened the door and stood there calmly while Juarez explained the
facts of life to him. "If you don't give me permission to come in, I'm going to
stand out here with these guys until a judge signs it and then we're going to come
later on today," Lister said Juarez told him. "So that's your choice. What's it
gonna be?" Lister said he was living in "a nice community"and didn't like the
idea of heavily armed officers hanging around in public view, so he invited them
in. According to Juarez, he told Lister they were executing a search warrant for
drugs and asked him to sign a consent form. Lister's response brought the deputy
up short. "I know why you're here," Lister told him, "but why are you here? Mr.
Weekly knows what I'm doing and you're not supposed to be here." Lister "told
me that he had dealings in South America and worked with the CIA and added
that his friends in Washington weren't going to like what was going on," Juarez's
report of the search stated. "I told Mr. Lester [sic] that we were not interested in
his business in South America. Mr. Lester replied that he would call Mr. Weekly
of the CIA and report me." Juarez decided to call Lister's bluff. "I don't know who Mr. Weekly is," the
detective told Lister. "Let me talk to him. If I find out I'm not supposed to be
here, I'll leave." Juarez silently urged Lister to make the call so "I could get a phone record
trace and find out who it was he was calling." Lister walked over to the phone
and started dialing a number. "He looked at me, smiled, and then put it back
down again," Juarez said. "He figured out what I was doing." "Never mind," Lister told the deputy. "I'll talk to him later." Lister claimed later he was planning to call his attorney and decided not to
antagonize Juarez by doing so. He denied telling anyone he was working with
the CIA, but other members of the raid team had very different recollections. Sergeant Art Fransen said Lister erupted in a "tirade" and began shouting,
"You guys don't know what you are doing. Oh, you don't know who you're
dealing with. I deal with the CIA. I got power!" Deputy Richard Love said Lister warned them, "You don't know what you're
doing. There's a bigger picture here. I'm working for the CIA. I know the
director of the CIA in Los Angeles. The government is allowing drug sales to go
on in the United States." Love said Lister also "seemed to have some intimate
details about a plane loaded with guns that crashed in Nicaragua and about the
pilot. Lister alluded to the fact that he had been on one of those planes before
and had actually been down there on a gun run." Sergeant Fransen, an ex-Marine, poked around in a file cabinet in Lister's
garage and said he found "stuff that a civilian shouldn't have or be privy to paperwork, pamphlets and manuals relating to technical stuff concerning
armaments."
Lister would later say that the cops may have gotten the wrong idea about
him because he "was involved in legal arms sales. The deputies saw various
weapons, scopes, pictures, literature or paperwork on arms and items that were
tagged 'Not for Sale in U.S.' " In Lister's account, members of the raid team
"became fascinated with what they found," and Sergeant Fransen walked by him
later and muttered, "Man, you've gotta be CIA." No drugs were found, and Lister was not arrested. The raiders packed up the
paperwork and hauled it back down to the sheriff's station, where it was logged into the Master Narcotics Evidence Control ledger as "miscellaneous CIA info."
Another report noted that there was "a lot of Contra rebel correspondence
found." As the raid teams straggled back to the sheriff's headquarters throughout the
morning and early afternoon, the deputies compared notes and concluded that
they'd been had. Someone had burned their warrant—and their suspicions
immediately fell on the federal agents. "After the search warrants had been served, the word among the investigators
was that the operation had been compromised," said former Lieutenant Mike
Fossey. "It appeared to have been snitched off by somebody in another agency,
which is probably not a local agency, but probably an agency back towards the
east, a big agency, a government agency." Guzzetta was convinced federal agents had burned the investigation, pointing
out that previous raids they'd conducted on the basis of the Torres brothers'
information had always produced large amounts of cocaine and money. The only
difference between those raids and Blandón's, he said, was the involvement of
the FBI and DEA. Deputy Love said it "was mutually agreed upon between narcotics
investigators that the suspects had been tipped off."In a case chronology prepared in late 1986, Majors II supervisor Sergeant Ed
Huffman noted that "items seized (such as scales, weights, cocaine cutting
agents) indicate cocaine activity. The small amount of cocaine (approx. 3 grams)
seized is in contrast to the investigation indicators (informant's information,
surveillance observations, background information). Did a burn occur? Possible,
but can't say where or by who." The Torres brothers would claim that the investigation was uncovered by
Lister, who'd spotted police surveillance teams outside of Blandón's car lot and
near his old house in Mission Viejo. Lister told the police and the CIA the same
story and said he informed Blandón about it two weeks before the raids. "Lister
states that Blandón simply smiled, but did not comment," a 1998 CIA report
states. However, Assistant U.S. Attorney L. J. O'Neale, who investigated Lister and
Blandón for several years, said the sheriff's probe was compromised by an FBI
agent who did "a clumsy investigation and contacted somebody who knew
Blandón and this person told Blandón about the inquiry." In an interview with
the CIA, Blandón said he "suspected there would be searches after FBI agents
interviewed one of his employees." But the Justice Department's Inspector General was unable to find evidence
of any contact between FBI agents and Blandón's associates in the weeks leading
up to the raids. The deputies' suspicions of federal interference grew even stronger once they
began examining the stacks of papers they'd hauled out of the houses. These
people weren't just dope dealers, they realized. They were dope dealers who
were dealing with the Contras and, apparently, the U.S. government. Deputy
Bartlett recalled seeing photos of Lister in a Contra military compound "standing
with a general, and in the background were tents, munitions and automatic
weapons." He also saw "U.S. Army training manuals and videotapes concerning
deployment, supply, ordnance and bomb disposal," telephone records showing
calls to Nicaragua, letters bearing Nicaraguan postmarks, and "possibly one
document. . .which had an FBI letterhead." "Some of the paperwork contained what he recognized from his military
career as Department of Defense codes," according toDeputy John Hurtado.
Other papers, Hurtado told police investigators,"contained some type of
reference to the Central Intelligence Agency. Hurtado believed some of the
papers had 'CIA' handwritten or typed on them. He also recalled a note pad was
written in what he described as some type of Department of Defense code."
When Hurtado questioned raid leader Tom Gordon, Gordon told him "they had
gotten involved in something over their heads." Deputy Dan Garner saw handwritten lists of weapons—specifically AR-15
assault rifles—and papers that involved "transporting weapons from one location
to another." He also recalled "that there were manuals on various weapons,
military training films, and photographs of military bases. . .the manuals and
films seemed to have been standard U.S. government military issue." Garner said
that they involved "higher-tech equipment such as ground-to-air missiles," and
that it was "unusual to have recovered these items in a search warrant." Deputy Juarez described some of the paperwork as containing "references
about Mr. Weekly and his contacts in Teheran relating to the hostages." He saw
"training manuals and training films for state of the art weapons—Stinger
missiles, tanks, and other armored vehicles." Observed Lieutenant Fossey: "If it was just arms they were talking about on
that paperwork, it's still interesting that we had a drug investigation going here." What was even more interesting were some of the files the cops had found in
Blandón's house: a big stack of bank records, showing deposits in seven bank
accounts. "Some of these deposits were marked 'U.S. Treasury/State' and totalled
approximately $9,000,000," the Justice Department Inspector General wrote.
"Other deposits were marked Cayman Islands and totaled about $883,000."
Stuck amongst the bank records was a note, in Spanish, from Blandón's sister,
Leysla Balladares, an FDN member who did Contra fundraising in San
Francisco. "Little brother," the note began. "There are the bank statements of the
suppliers of the Contra. They have issued checks to different persons and
companies, the same to the Cayman Islands. These are just one part and is the
continuation of the report you have. I'll later send you the rest so you can laugh." Balladares told Justice Department investigators that she got the documents
from a Contra official shortly before he was killed in Honduras, and said they
documented how Contra officials were stealing money and perhaps laundering it
through the Cayman Islands. She'd sent Danilo copies because she thought he
would be "amused at the level of corruption of some of the Contras." The documents partly solved one of the day's mysteries—the identity of
Lister's purported CIA contact, Mr. Weekly. Weekly's name was found in a sheaf
of handwritten papers dealing with weapons and equipment sales. The
documents included a list of armaments: antiaircraft weapons, fire bombs, 1,000
AR-15 semiautomatic rifles, air-to-sea torpedos, and napalm bombs. The next page bore a list of names and phone numbers. Near the name
'Aparicio," Lister had written: "FDN coordinator." Another list of names
included Bill Nelson, the CIA's former deputy director of operations; Salvadoran
politicians Roberto D'Aubuisson and Ray Prendes; and someone named Scott
Weekly.In another document, Lister had written, "I had regular meeting with DIA
subcontractor Scott Weekly. Scott had worked in El Salvador for us. Meeting
concern my relationship with Contra grp. in Cent. Am." (The DIA—Defense
Intelligence Agency—is the Pentagon's version of the CIA, responsible for
collecting military-related foreign intelligence. It was heavily involved in the
Contra war and in the civil war in El Salvador.) The detectives were confused. DIA? Hadn't Lister said Weekly was with the
CIA? What the hell was the DIA? When the detectives read the confidential
security proposal that Lister's Pyramid International security company made to
the government of El Salvador in 1982, they knew they were in unfamiliar
territory. They'd never run into drug dealers who did business with heads of
state. Detective Juarez, who also translated the bulky document from Spanish to
English for the flabbergasted detectives, said he became concerned that the
records "would not remain in evidence for very long because of their sensitive
subject matter." He made a copy of the Pyramid International proposal and took
it home with him. That decision, Juarez suspects, probably cost his brother-in-law, Manuel Gómez, a 32-year-old Salvadoran jeweler, his life. Juarez told the
author that in 1993 he gave Gómez a copy of Lister's security proposal. His
brother-in-law sympathized with the leftist rebels in El Salvador and was active
in the Salvadoran solidarity movement in Los Angeles. Gómez was going to get
the documents to an underground radio station in El Salvador in hopes of
publicizing this example of the U.S. government's unsavory involvement in
Salvadoran internal affairs. "Two weeks after the document made its way to the underground radio
station in February 1993, Manuel Gómez was found murdered in his car," Juarez
told police investigators. He said Gómez "had apparently been tortured and
strangled with a wire. His body was found wrapped in a blanket." When the
police checked out Juarez's claims, they found that Manuel Gómez had indeed
been strangled in 1993, his body dumped in the trunk of a car in South Central
L.A. They also found a note in the homicide case files reporting that Deputy
Juarez had called the police five days after the murder to tell them that his
brother-in-law "had government documents in his possession that may have
provided a motive for the murder." But the homicide investigators decided
politics had little to do with the killing. After picking up rumors that Gómez was
dealing drugs in South Central, they wrote the death off as drug-related and
didn't pursue it much further. The killer was never apprehended. Juarez sat down at a computer terminal and entered Ronald Lister's name into
the NIN (Narcotics Information Network) database to make sure that any other
narcotics agents who encountered him knew what they were dealing with. He
reported that Lister had been searched in connection with a narcotics
investigation, "and locations were cleaned out. Documents recovered indicate
that Suspect Lister is involved in buying and selling police and government radio
equipment and heavy duty weapons. Suspect possibly FBI informant and private
detective."Other deputies also began furtively copying some of Lister's papers. Deputy
Garner grabbed a handful of records, including Lister's handwritten notes, as did
Lieutenant Fossey. Fossey and Garner took the copies home with them "to
safeguard them from loss or theft," Fossey explained. It would prove to be a
wise precaution. A few hours after the raids, Blandón's lawyer, Bradley Brunon, called the
sheriff's station to ask where his clients were and how he could bail them out. He
said Tom Gordon answered the phone and tore him a new asshole. "He was a vile, vicious son of a bitch," Brunon recalled. He said Gordon
screamed, "I'm not telling you anything! You're worse than they are!" "'Fuck,'I said, 'I just called up to find out where you're going to arraign the
guy.'" "'Fuck you! I don't have to tell you!' I mean just, boom, off the wall." So Brunon called Gordon's supervisor, Sergeant Ed Huffman. Huffman took
notes of the odd conversation, which he later passed along to the FBI. Huffman
had suspected all along that there was something creepy about the Blandón case,
and the phone call from Brunon clinched it. "Thought you knew CIA kinda
winks at that activity," Brunon told the astonished detective. "Now that U.S.
Congress had voted funds for Nicaraguan Contra movement, U.S. government
now appears to be turning against organizations like this." In an interview, Brunon confirmed that as "not far from what I said." According to former narcotics bureau captain Robert Wilber, Sergeant
Huffman came to see him afterward and sourly remarked, "We bust our ass and
the government's involved." The deputies "were upset about the incident,"
Wilber said, but he didn't take it too seriously because he thought they were
using it as an excuse not to work with federal agents again. If the Majors needed any more excuses, they got another one quickly enough.
According to Deputy Bartlett,"Two federal agents came into the office looking
angry. With the agents were a 'zone' lieutenant and the Narcotics Bureau admin
lieutenant, both of whom also appeared angry. . .. The agents put some of the
evidence into boxes and then walked out of the office." Sergeant Huffman's daily
diaries and other records recently found in the Sheriff's Office's archives confirm
that agents from the DEA, FBI, and IRS arrived at the narcotics bureau on
October 30 and for two days pored through the seized files, making copies of
everything. Later that night, a cable from the CIA's Los Angeles office marked
"Immediate Director" buzzed out of the teletype machine at CIA headquarters in
Langley, Virginia. Entitled "Three Persons Claiming CIA Affiliation," the once secret cable stated, "Three individuals claiming CIA affiliation have been
arrested by Los Angeles County Sheriff's Department on narcotics related
charges. Details received via FBI are sketchy. However, request preliminary
traces to determine if any of the three listed below have CIA connections." The
first person named was Ronald Lister, who "claims that for many years he has
assisted in supplying small arms and helicopters to CIA contacts in Latin and
Central America." The cable also named Danilo Blandón, identified as an
accomplice of Lister. Curiously, it also asked for a trace on Norwin Meneses,
who was identified as another accomplice of Lister's. Why the Los Angeles CIA
was asking about Menses in connection with the Blandón raid is unclear, since
he was neither arrested, named in the search warrant affidavit, nor even living in
the United States. "Please respond immediate indicating what portions of response may be
passed to local law enforcement authorities," the cable concluded. Langley
cabled back the next day; there were no headquarters traces on Blandón and
Lister, but Meneses was "apparently well known as the Nicaraguan Mafia,
dealing in drugs, weapons, and smuggling and laundering of counterfeit money."
What happened next is still a matter of dispute. After the raids, Sergeant Gordon and Deputy Juarez said they took a couple
of days off. When they returned to work, Gordon said, he was told by deputy
Dan Garner that the CIA had come into the offices and taken the records the
Majors had seized during the raid. Gordon didn't believe it and went to the
evidence room to check. The papers were no longer there. According to Garner, Gordon walked back into the squad room and
announced, "The evidence is gone." Juarez said he ran over to the evidence
lockup and confirmed what Gordon was saying. Nothing was left. Both Juarez
and Gordon claimed they never saw the documents again. In addition to the seized documents, said Blandón's attorney, Brad Brunon,
the official police records of the raid seemed to disappear also. Despite his best
efforts, he was unable to come up with more than an informal note about the
pre-raid briefing, and that only by accident a couple years after the raid. "For a
long time, they (the Sheriff's Office) never acknowledged the existence of this
warrant. I mean the whole thing was quite mysterious. Boom, they did 15
locations. Nothing turned up. Nobody got busted. There was a little tiny bit of
cocaine found in one location. Nobody got filed on. They gave all the stuff back.
The whole thing just was very strange," Brunon said. "I'd never had a case where
all the reports disappeared. I mean, early on, the only theory I had was the CIA
involvement." An investigation by the L.A. County Sheriff's Office in late 1996 strongly
disputed the idea that "mysterious federal agents swooped down. . .and stole
away with any documents relating to this case. Investigators have determined
that this allegation was apparently spread through second-hand rumor and
innuendo among some members of the narcotics team personnel." The
department said that for each item seized, "there is a consistent paper trail." The paper trail, however, raises more suspicions than it quiets. If the Sheriff's
Office files are accurate, nearly all of the seized evidence was given back to
Blandón and Lister within days of the raid, and apparently no copies were
retained by the department, even for intelligence purposes. The Sheriff's 1996
investigation failed to find a single document that had been seized during the
raids. As for the piles of copies made by the federal agents in the days following
the raids, nearly all of those have disappeared also. According to the Justice
Department Inspector General, neither the DEA, the FBI, or the U.S. Attorney's
office could locate a single one of the more than 1,000 pages of documents the
agents copied. The IRS, fortunately, still had some stashed away. All of the property that wasn't claimed—including the cocaine and the
weapons manuals—was allegedly destroyed within six months. That destruction
occurred while the investigation was still listed as open and active. As Jerry Guzzetta had done earlier, the L.A. County Sheriff's Office soon
concluded that the Blandón case was just too big for it to handle alone. Sergeant
Huffman"did not believe it was the proper responsibility of the L.A. Sheriff's
Department to investigate the activities of the CIA," he said; he and his superiors
"felt it would be more appropriately handled by federal agencies from that point
because there was evidence that there was a continuing narcotics trafficking
organization which involved a very large geographical area." When the U.S.
Department of Justice stepped in and offered to adopt the investigation, the
Majors had no objections. Sergeant Gordon, in fact, was no longer around,
having been promoted and transferred out of the Majors. According to Sergeant Huffman's notes, one of the first things the federal
agents did was to put Gordon's bombshell search warrant affidavit under court
seal, which kept it from becoming public. The affidavit also disappeared from
the Sheriff's Office case files and was never found again. (In 1996 Sheriff
Sherman Block sheepishly admitted that his investigators were unable to locate a
copy of the affidavit in the department's files and had to use the author's copy,
which had been posted by the San Jose Mercury News on its Web site. And
again, the only reason that copy existed was because an officer took a copy of
the affidavit home shortly after the raid.)Huffman was then informed that no charges would be filed against Blandón,
"to protect the ongoing investigation and informants." Despite being caught redhanded with cocaine—and admitting it was his—the drug kingpin was set free.
Federal prosecutors interviewed called that a stunning decision, given Blandón's
stature as one of L.A.'s biggest traffickers and the fact that he was in the U.S.
seeking political asylum at the time. The mere fact of the arrest should have been
enough to deport him, his wife, and every other Nicaraguan implicated. "If he
was a major trafficker and we got him with even a little bit, he'd have been
prosecuted," said former federal strike force attorney Brian Leighton, who
worked in central California during those years. "You could also charge him with
conspiracy, because in conspiracy cases you don't need any dope. I've done
plenty of no-dope conspiracy cases. Just because he has [only] a half a gram
doesn't mean you let him go."But Blandón was not merely turned loose. On December 10, 1986, he has
said, he was formally notified that the case against him had been dropped and that there would be no charges filed. That day, records show, he drove into Los
Angeles and hired a lawyer to file an application for permanent residency with
the Immigration and Naturalization Service, which would make it much more
difficult to deport him in the future. Blandón's choice of attorneys was interesting; he hired a man who was then
under federal indictment for immigration fraud, and a cocaine addict to boot.
Just a week before Blandón retained him, attorney John M. Garrisi had been
charged with illegally smuggling Iranian scientists into the United States.
Garrisi's lawyer, Roy Koletsky, said Garrisi had "a pipeline" into the Iranian
community and had been bringing Iranians into the States since "around the time
the Shah was deposed. He had a number of Iranians working in his office. They
spoke Farsi at the office." At Garrisi's disbarment hearing, it was alleged that he had been crisscrossing
the globe in his quest to get Iranians into the United States, creating phony
immigration records with an apparently genuine stamp from the Iranian Ministry
of Justice and referring clients to an expert document forger. He was also
accused of cheating clients of money. Garrisi "repeatedly stated he believed he
had a duty (emphasizing repeatedly the word 'duty') to bring 'these people' (most
of his visa clients are Iranian) into the United States," a California Bar
Association report stated. "He strongly inferred that he would pursue that duty
even against their expressed wishes." Koletsky had no idea what "duty" Garrisi was talking about, he said, and
Garrisi did not respond to interview requests. After one mistrial, he was
convicted in 1987 of making false statements and sent to federal prison for a
year. Blandón's application for permanent residency, which disclosed his
membership in an unnamed "anti-communist organization," reported that he had
been arrested for "possession of drugs and weapons" in October 1986 but added,
"They didn't find nothing." Under "Outcome of Case," Blandón wrote: "No
complaint filed. They exonerated me 12-10-86." On December 11, 1986, one day after Blandón says he was "exonerated," the
director of the FBI sent a long teletype to the CIA's deputy director for
operations and the director of the DIA. 'The teletype said the FBI was doing an
"investigation focused on a cocaine distribution operation principally comprised
of Nicaraguan nationals. Significant quantities of cocaine are reportedly
distributed throughout the West Coast." Furthermore, "Information provided to
FBI Los Angeles indicates that subject Ronald Jay Lister has made statements
concerning his 'CIA contact,' identified by Lister as 'Mr. Weekly.' Investigation
has also identified documents indicating that Lister has been in contact with
'Scott Weekly' of the DIA." The CIA replied that it had information only on Meneses and Murillo. The
DIA claimed it didn't know anything at all. But that didn't keep Riverside FBI agent Doug Aukland from digging a little
further. He decided to do some checking on "Mr. Weekly," Ronald Lister's
alleged CIA contact. "Scott Weekly is an arms dealer in San Diego," the agent told Sergeant
Huffman in mid-January 1987. "Can't confirm Weekly is or isn't CIA
connected." But that was only because Aukland wasn't asking the right people:
his own bosses in Washington. By then, records show, senior officials at the U.S.
Department of Justice had Weekly under investigation and were intimately
familiar with him because they had been reading transcripts of his telephone
conversations. Those transcripts suggested that Scott Weekly was connected not
only to the CIA but to the National Security Council and the U.S. State
Department as well.next"He reports to people reporting to Bush"